swombat.com

daily articles for founders

Daniel is the cofounder and MD of GrantTree, previously CTO/cofounder of Woobius and Vocalix, a full-time entrepreneur since 2007, and founder of swombat.com. I previously worked at Accenture and studied Physics at the University of Oxford.

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Swombat.com started off as an individual effort, but it's now becoming the work of a team (to be announced).

Together, on swombat.com, we summarise and comment on the best articles for founders each day, as well as occasionally post our own thoughts and advice, so you can read the most useful articles while focusing on building your own startup.

My first startup targeted the impossible market of "small businesses online". This was a disaster, since such a wide market presents a couple of insurmountable challenges. First, it's so wide that it doesn't have any specific needs. The problem with that is that the only way to get a new product out on a low budget is to focus on a clearly defined niche and be very specific and therefore better than the generic solutions out there. The second problem was one of marketing: it's impossible to target such a wide market.

Jason Cohen describes another mythical, unattainable market: that of companies with 50-500 employees, or the "mid-size market".

They’re not “small enough to be nimble,” because at fifty employees they’ve already established much of the lumbering process and bureaucracy of companies a hundred times their size. Shackled by budgets and internal politics, technology changes require expensive coordination and retraining, and fear of change trumps potential rewards of improvement.

All this makes for an arduous sales process just like with big companies. But although they have the process and controls of a large company, they don’t have the budgets to match; there’s no large reward for successfully navigating the painful, Herculean sales adventure.

His conclusion:

So my immediate reaction to anyone “selling to middle” is the same: Yuck. If you’re going to do it anyway, I hope you have some nice, extenuating circumstances that truly makes you the exception to the rule.

Jason also rightly points out that "50 people" can mean very different things in different industries. As Peter Drucker points out in some of his books on management, a 500-people factory is a relatively small factory with fairly straightforward operations (this was back in the days when there was less automation, mind you), while a 500-people consulting firm is a very large and complex firm.

Is it possible to crack the 50-500 market with some kind of innovative sales process? I'm not sure. If it is, I certainly don't know how.